Sadly he only had ten minutes. It would have been good to have this opening challenge expanded out so we can all recognize many of the areas that we are not doing enough in our need for the necessary energy transition.

Mr. Neike spoke of the battle we have in the energy and urbanization transformation, the need to accelerate the transition.

So his question sparked my thinking here that in my view, there are four parts to any Urban Transition.

Today 55% of the world’s population resides in urban areas; in2050, that will be staggering at 68% of the world population will be living in cities. We are heading for an urban crisis unless we recognize the four parts of the urban transition and bring them together.

The recognition that there were four parts comes from a piece I was reading a while back was to recognize that Urbanization has four urban transition aspects, outlined by the Urban Transitions Alliance

We need a significant Infrastructure transition, as much of the existing infrastructure is not fit for purpose. We need comprehensive infrastructure plans, ones built on flexible and renewable energy.

Secondly, we need a mobility transition. Our dependence on vehicles needs to change. We must accelerate the e-mobility thinking, in trains, buses, motorbikes, and cars. Many of our cities are choking on pollution from hazardous air quality and congestion. Our mobility does not necessarily need to be our own

Thirdly we need this all-important energy transition. We need new energy solutions; we need to deliver sustainable electricity, powered by green energies, not carbon-based. Cities can only become attractive places to live if we make this energy transition and that will require new physical systems that meet the needs of expanding cities

The fourth and perhaps the most important to manage, and manage well, is the social transition. We have constant tensions in cities, and it is through social engagement, building a shared identity can we successfully manage any change. We need to be fully inclusive, so all living in a city or its urban area can share in any economic and societal gains.

So the urbanization needs a real connected narrative that should connect these four parts.

Urbanization needs to take the idea of smart, through data, and make the city intelligent. Urban transitions are both physical and technology solutions combining. The solutions need always to change the current performance and delivery of a different sense of hope.  A set of solutions that simply improves on the existing. These always come from applying innovation to these four transition needs of the urbanization story, so it becomes a “fertile” place for dynamism, ideas, and where social cohesion can thrive.

We are seeing pockets of progress occurring in many cities, but others are perhaps going backward, take the case of Delhi in India. After the initial reaction to do something, we are past the point of picking off the low hanging fruit; we need to dig deeper into undertaking the urbanization transition. Many of our cities are in real crisis or lacking the transformational plan to take them through their changes required. The hard part of this transition is ahead of us.

So we are not doing enough, but in Mr. Neike’s closing, he struck a highly collaborative note.

So, returning to Mr. Neike’s closing remark was, a call to action: “do it together, do it fast.” This “fast and together” is needed to be highly collaborative energy and urban transition; it involves all of us and requires all of us to come together to resolve the multiple reasons for these transitions I am suggesting go together.

We have highly complex energy and urbanization transitions ahead of us. All I can say is we live in a polluted world, we rely on our energy to power our lives, and we, need to function individually and collectively. We live in a highly connected world, and, it is our “energy” source that makes it happen.

So today we are doing something but tomorrow we have to really learn to work even harder. Why?

Sadly, yesterday, the United States began the process of withdrawing from the Paris Agreement, notifying the UN of its intention to leave. The notification begins a one-year process of exiting the global climate change accord, culminating the day after the 2020 US election.

That presents even more significant challenges to the battle of achieving the energy transition.

Please visit my post for reflecting on this decision by the US administration:  “A dark day for the climate and the fight over global warming?” that is over on my ecosystem and platform posting site.

**Disclosure: Part of my work in research and advising in the energy transition is due to being engaged in the #SiemensInfluencer community or #SIEx. I want to emphasis the opinions and views expressed here are my own and do not reflect those of Siemens.

The post So are we doing enough in the Energy and Urbanization Transition? first appeared on Building Your Innovation & Ecosystem Intelligence.

We are on the cusp of a new digital era in energy.

What is new, is the pace of digitalization occurring through technological innovation, providing solutions that enable the energy system to be transformed?

Digitalization across the energy landscape is determining the system-wide changes of connectivity; it is linking, monitoring, aggregating, and controlling assets to cause a fundamental “blurring” between who supplies and who consumes energy.

The old paradigm of central grids will undoubtedly continue to provide the energy infrastructure backbone and keep balancing the electricity transmission network, but there will be significant differences at the local level (final point of supply) to trade energy through different grid edge designs and services.

Digitalization brings us closer to the end-user – knowing your grid edge and how to respond

The closer in proximity to end-use (homes, business, vehicles) is the grid edge as the hardware (things we can touch and see) such as solar panels, meters, energy storage systems, thermostats, appliances, and building controls. These “things” are being designed to connect and combined with grid edge software that triggers demand and optimization. Software that builds data analytics or planning information that allows for a new form of aggregation that gives us all a greater engagement in managing our energy consumption and begin to sell surplus electricity through the management of their own personal energy system.

The digitalization and innovation of this grid edge will transform the electricity industry as it can give a choice to the end-user on preferences, what they chose to connect into (power consuming connected devices), and give them a greater awareness of what makes up the energy chain. The end-user can begin to demand electricity sources that are fuelled by renewable energy; they become more interested in their carbon footprint and become prosumers where they achieve higher interactions, growing expectations they are in reliable systems, and offered protection and security in what they engage within.

Digitalization is the catalyst for engagement and connectivity within the energy system. Its value is to provide safety, productivity, accessibility, reliability, transparency, and offer sustainability? It is the new architecture of the energy system that interconnects our energy solutions.

As more and more deployment takes place, providing new connected technology, we see autonomous cars, home systems, and connected smart buildings offered as new end-user solutions. It is the data that is allowing AI and machine learning that are giving us this new form of digital intelligence.

The application of digital technologies is widely impacting end-use.

Today we are seeing increased sensors and use of devices that are optimizing process controls, providing industrial automation, give us smart thermostats, autonomous cars, and trucks, for example.

We see new services on providing greater security and comfort in intelligent street lighting, occupancy, and personal relationships with our buildings. We are beginning to work through the prospects of mobility as a service, remote control, unmanned drones, shipping, and possibly driverless cars, offering the potential for new business models. All of this comes mostly from digitalization being part of the final solutions to connect “it” to us.

Digitalization is about to reshape transportation, and its energy design and consumption need to be redesigned to adapt. The whole smart, digitally-enabled charging devises of electric vehicles where recharging can be more optimized at “off-peak” times

In our buildings, undoubtedly we can predict and respond to changes in weather, occupancy, and understanding the ‘connected’ parts of a building, so our energy consumption can improve operational efficiency in lighting, predicting, and managing heating and cooling.

In industry we can continue to advance our processes through digitalization coupling sensors and analytics to predict potential equipment failure, repair them remotely, allow AI and machine learning to improve productivity through the use of robotics, 3 D printing and provide connectivity both within the plant and to other locations, to manage and monitor production in new digital ways.

Traditional fuel providers are equally applying digitalization solutions

Within traditional energy consumption areas of the oil and gas industry, in coal and the power sector, the value of deploying more imaginative digital solutions can enhance operations, build-out more modeling options on the data gathered, provide a more significant opportunity for automation and predictive maintenance.

Digital assessments of physical plant and networks can reduce downtime and extend the operational lifetime of assets through monitoring and deploying solutions that rely on their digital component (drones, tele-remote equipment, driverless trucks controlled by a control room due to harsh conditions). Applying more digital applications enables these industries to optimize and stay competitive with the alternatives in renewables.

We need to be digitally smart in renewables

The other significant gain from digitally connected systems within the energy system is the new opportunities that the new connecting points between generation and consumption will bring. Smart appliances will enable intelligent demand response; digital can integrate variable renewables  (ones that rely upon the sun and wind) to match energy demand response.

For this integration to happen we need to design a more decentralized energy system that can facilitate distributed energy resources, so we can store energy and have it available on demand. Blending different energy sources needs a different digitally smart energy system to optimize options and provide electricity in more flexible and adaptive ways.

Digital solutions will need to draw more energy than before

As we build out the new energy systems, there will be a need for more data centers, building data networks, and the massive proliferation of all the connected devices. The challenge is, as digitalization solutions consume more energy, we need to continue to drive devise and designs to be more efficient and have higher standby capacity.

As we become increasingly reliant on this digitally connected, the energy-hungry world we are heading towards, it is one that needs managing in new ways as we become more climate aware and expect clean energy to be made available 24 x 7.

Cross-cutting risks of Digitalization

As we rely increasingly on digital solutions, we will become more vulnerable to digital threats, and we need to build more significant protection measures built into our energy systems. We need a robust, comprehensive digital resistance to prevent or reduce cyber-attacks or the growing effects of geomagnetic storms that can effectively “knock out” our energy systems.

We need to consider the privacy and data ownership questions increasingly, that balance for the benefit with the “trading off.”

Finally, we will continue to go through such an upheaval in the energy sectors, in job and skill changes. Whole work patterns, tasks, and requirements needed to effectively manage the new energy system will have significant disruption and radically alter how we undertake its management.

Digitalization Of Energy 

As digital becomes increasingly persuasive and part of our lives, we will undergo a real change in how we view our energy consumption and contribution to the system. In many ways, digitally is offering us an incomplete or undefinable future, in energy, in our overall reliance on digitalization solutions.

The goal needs to be that the digital technologies we introduce need to help us become more connected, intelligent, efficient, by having, resilience, reliability, and sustainability built into the energy system we are designing. Energy is changing significantly; we are all becoming plugged into a progressively digitally renewable world.

The post The Digitalization of Energy first appeared on Building Your Innovation & Ecosystem Intelligence.

This week I have had one of those most intense periods of researching and then absorbing the material around different energy issues.

Everywhere you turn, you stumble across reports on one aspect or another of the energy transformation we are undertaking.

I am looking at this energy transition through the eyes of the innovator, as it offers so much in new solutions and designs that any innovator would love to be part of.

Energy is tackling one of the world’s toughest tasks, turning our existing energy system, reliant on fossil fuels into one based on renewables, is an enormously complex set of challenges in its goal of decarbonizing it.

There is such an innovation landscape of solutions that are contributing to the world achieving a more renewable-powered future. Technology innovation, suggested new business models, outline proposals for changing policies, processes, and market design all are being “sketched out.” It is overwhelming, but innovative solutions need to be continuously refreshed to reflect this consistent inflow of understanding, relating to the energy transition that is being undertaken. It is evident innovation must be way broader than just technological RD&D.

During this past week, I have been working through specific aspects of the energy transition model.

Firstly, I have been looking a little more at the emerging focal point of Grid Edge. The Grid Edge includes the innovative solutions of hardware, software, and business innovation that are enabling smart infrastructure to be installed at or near the “edge” of the electric power grid. So things that you can touch or see, such as solar panels, metering infrastructure, local energy storage systems, smart thermostats, appliances, and building controls, are in Grid Edge Hardware solutions. The software is automating this, more demand-responsive, real-time data, data analytics, and planning systems to extract the value out of the data. Business innovation is turning that knowledge (data) into value for aggregation, trading, and supporting whole communities with managing their energy needs, for example. The Grid Edge solutions are on the rise.

My second area of focus was on the contribution digitalization is giving energy. The ability to connect everything up, to collect its data, to communicate it, and analysis it is changing the nature of how we are managing energy. Transport is becoming smarter and more connected through onboard computing power, the use of sensors, and the tracking, and the whole world is redefining this as e-mobility as the cars become electric. The value is in reducing vehicle emissions and Co2 levels. Buildings are also going through a digital revolution for managing heating, cooling lighting, and occupant movement. Having a more connected building also allows for increased security, maintenance, and safety. Thirdly Industry is undergoing so much automation, enabled by the digitalization and technologies where AI, Robotics, 3D printing, and machine learning are all ushering in entirely new ways to operate and manage plants. The impact of having digitally interconnected systems is revolutionizing energy management, let alone the control of the assets these digital solutions are built into.

My third area of more in-depth investigation has been Hydrogen. Clean hydrogen has been enjoying unprecedented political and business momentum. To achieve a low-carbon transformation, to decarbonize the energy world and meet the targets in the Paris Agreement (2015) from electricity through renewables, then it needs to substantially increase its share of all energy supply. Today gas, coal, and oil still dominate the energy supply. So many sectors require high-grade heat such as transport (aviation) or specific heavy industries (cement, pharmaceuticals, chemicals), and it is difficult purely through the means of electrification.

The promising solution is the scaling up of Hydrogen solutions, from renewables. The argument is that hydrogen is the missing link in the energy transitions we need to make. Dealing with variable renewable energy (VRE) from solar or Wind requires storage, and solutions like electrolyzers can help integrate VRE into power systems. The use of an Electrolyser is a device that splits water into hydrogen and oxygen using electricity and becomes the carrier of renewable energy and complements electricity. This way, we can balance loads on a grid through more effective storage and industry or city demands. Many hydrogen technologies are maturing at present and are at the point of scaling up that will help accelerate the substitution of fossil fuels that have this higher heat attribute. Today hydrogen is produced from natural gas in refineries, ammonia production, and bulk chemicals, and hydrogen from renewables can replace fossil fuel-based feedstocks, where we have high carbon emissions today.

My fourth area was checking back on the tracking of clean energy progress by technology in the different energy sectors or subsectors. These progress report cards come out regularly, but the one I wanted to work through was from the OECD and IEA ones. This clean energy report tracks 26 technology classified areas of energy, covering energy supply, energy demand, and energy integration. The approach makes sense as it is the ability to deliver the WHOLE energy system will give us the climate, renewable, and energy transition benefits. Managing this transition across the globe is a complicated task.  At the time of the report, 2016, only 3 of 26 tracked technologies were on track towards a sustainable energy transition by 2050. Eight are seriously off the track, including how coal is still dominating global power generation, advanced biofuels solutions are still lacking take up to scale and fully validate them, and we still have a staggering two-thirds of countries that do not have building energy codes in place.

I have also been reading we are way off track on hitting the 2-degree target for global warming, agreed at the Paris Agreement (UN-related reports), and the growing consensus is we are at 3 to 3.5-degree mark. That is accounting for the level of commitments being made today to tackle climate warming, where our energy is such a significant contributor to emissions. So in tracking the essential technologies within the energy transition, you get a clear sense of our progress or lack of it on a global scale. This 30,000-foot perspective is sometimes sobering to all the activity that seems to be occurring at energy events or within the companies dealing in solutions. Yet the gaps, in reality, need addressing and fast.

There are so many promising technologies lagging the commitments dues to lower funding, more significant technical difficulties, or not being able to be exploited due to political, regulatory, or business constraints. Innovation solutions can only advance so much, but without the political or business will, resources or capital can only progress far slower. It does seem we do not have the momentum we need to undertake the transformation of our energy systems yet.

Drawing some interim conclusions

Coming to the end of my specific focal points from this week, the cost of this energy transition needs to run into trillions of dollars. One account is around $20 trillion up to 2030. In the context of global GDP, this is running about $80 trillion a year, and the global annual investment is at $20 trillion. Our capital markets are presently not geared to this, but it is argued these additional investments in energy towards the 2-degree pathway should not be a major macroeconomic challenge, but at individual levels, it is daunting. Energy does need to change from high to low carbon technologies, but we are still glossing over one of the biggest challenges within this transition journey; how we pay for and finance the energy we use and who in investors, industries, governments, and companies will share the burden.

There is a hard reality we are failing to make in the energy transition. Making any move wholesale from an existing energy system to a future low carbon system has disruption, competing forces and vested interests, it has huge risks and the methods to manage this transition needs new types of investment portfolio’s to diversify risk and build investment concept models to manage this change, fund development and put a significant repowering into the projects, big and small, we need to undertake.

Next year, 2020, the world leaders meet, I think in China for a review of past agreements, progress and make their next assessment around the warming climate. Much as there is a lot of hype and industry activity, the reality is the level of capital, commitment, political and business determination, and necessary momentum for an energy transition is still not in place; we are lagging badly, and we need a global commitment to engineering the energy system as part of the recognition that our energy systems are a principal cause of global warming. We are approaching this in “piecemeal, ad-hoc ways, and not through structured and institutional agreements to bring this together.

The need is for robust, comprehensive energy transition paths

As we move towards a world of more electricity based on renewables, we do need to have well defined and executed transition paths. We need full energy market designs and not, as we presently see piecemeal solutions. We are tackling a global need to reduce global warming, to reduce carbon and all greenhouse emissions, and have more renewable, stable, and flexible solutions that reflect the needs and demands of the 21^st century, where we are highly dependent on a steady, sustainable source of energy supply.

Let the innovator’s energy transition journey continue…………………..

** the Investment numbers quoted in my interim conclusions are taken from a paper  released by www.energy-transitions.org. in their Better Energy, Greater Prosperity report supported by the ETC Secretariat, here in Europe.

The post Continuing the Energy Transition Journey first appeared on Building Your Innovation & Ecosystem Intelligence.

What fascinates me presently is the energy transition currently being undertaken, due to the enormous amount of innovation options being considered and applied. New technologies are changing the very nature of how energy is going to be produced and delivered over the next ten to twenty years.

When you consider how vital energy is to society anywhere in the world, you realize what a significant time this is to curb the carbonization and radically resign the system based on renewables and green electricity. It might sound obvious, but having access to energy is crucial to our daily lives; it powers everything we do. Not just in the home, in our business lives, in our ability to function, it enables us to be productive or simply “plugged-in.”

We are undergoing such a revolution that will have an impact on all of our lives. During the next ten to twenty years, we are in a race to transform our energy system, one that moves from fossil fuel reliant to clean fuels based on renewable energy. We need to decarbonize and make energy greener.

The other part of the energy transition is to provide a reliable, sustainable energy system by exploiting all possible efficiency out of the existing system. Also we need to radically apply new technologies for electrification that will be transforming the generating, transmitting, converting, storing, and utilizing energy, in entirely new ways.

We will pass through many different parts of this energy evolution through a complete change in the infrastructure, termed today as smart infrastructure, as its solutions are focused on delivering the decarbonizing, decentralizing, and digitalizing of power generation to provide system flexibility and greater end-user involvement.

Undertaking such a transformation will require four essential aspects to happen:

1. A real political commitment to make this change to reduce the dangers of global warming and power outages.
2. A radical redesign of the energy system in the supporting policies, regulations, and subsidies in existence today and needed to make this a fully greener energy system
3. Public awareness and engagement in the sheer size of these changes, their impact on daily lives and their social, economic and environmental benefits in eventual outcomes
4. The dependence on innovation to transform the system through technological solutions, market redesign, and new business models.

The magnitude of realization of achieving deep decarbonization of our energy systems, the upending of fossil fuel reliance into renewables, and this undertaking of a complete energy system redesign is hard to comprehend within the time scales set. What we do in the next ten years will determine if we can achieve the goals of reducing global warming by 2 percent by 2050. The cost of not achieving this will be significant for its impact on our lives if we do not attempt to undertake this.

Allow time for new technologies to commercialize.

To undertake something like a global energy transition, you need time; time to figure it out, validate the options and pathways and then provide the necessary time to pilot, learn and then commercialize the (multiple) solutions to be scaled and applied. The cost of this transformation will eventually run into trillions of dollars.

The innovation aspect needs to gather momentum. Technologies are emerging based on several solution needs:

• Ones that are grid edge in design, meaning more customer-facing and power-flow controls
• Radically different storage technologies that can handle the variances in renewable of holding the supply of solar and wind generating energy as well as converting energy through electrolysis, hydrogen and synthetic fuels that serves the needs of mobility, heating, agriculture
• The present gas and steam turbines need to be upgraded, optimized, converted and have applied hybrid solutions that combine different energy sources, various technologies that combine to provide mixed energy source power plants
• The advancement of carbon capture techniques and carbon removal
• Exploring next-generation nuclear fission and fusion
• Finding different solutions that allow high-temperature superconductor transmission and solid-state transformers to be introduced increasingly into the energy system
• Finally, putting to use digitalization for machine and device connectivity, managing growing complexity in overall systems, increasing the transparency, reliability, and resilience through the application and use of sensors, monitoring, analytics, and self-learning systems to increase efficiency and effectiveness.

Each of these “demands” new technology design.

They need to be economically viable and scalable and need to drive a clean energy transition and provide increasing systems flexibility

These new technologies need to break into the existing lifecycle of energy design to substitute incumbent solutions. The speed of development and deployment will be unprecedented for use to meet the climate goals, decarbonize the system, and change the fuel source. Fuels that are based on renewables or green alternatives that can continue to use existing fuels of coal, gas, or oil that allow for carbon capture or removal.

So we need to blend much of what we have seen coming or emerging from technology solutions based on the internet of solutions, artificial intelligence, and in the future, blockchain. We need to find innovation within energy as a service, in peer-to-peer trading and localized generation of energy so individuals and communities can become active participants. As we increasingly use low-carbon electricity we have to begin to decarbonize our transport, buildings, and industry.

Lastly, we need to find innovative solutions for flexible power generation sourcing, establish multiple interconnections of fuel supply that is more related to demand response through different storage and distribution designs, and enable these to be fully digitalized to capitalize on these effects and in sustaining ways.

The need of innovation solutions could not be greater in demand

The role of innovation in the energy transition is critical to delivering the new solutions outlined above. It is a fascinating time to be involved in innovation and all the changes that are undergoing within the energy sector.

The post Accelerating Innovation in the Energy Transition Journey first appeared on Building Your Innovation & Ecosystem Intelligence.

When you investigate and research the energy transition that is underway, the higher focus to date has been on the progress to replace fossil fuel with renewable power generation technologies. As crucial renewable energy solutions (wind, solar) are falling in price comparison, we are beginning to see clean energy solutions for industry, for the environment, and society, as a whole. Energy transition and moving to renewable power generation, though, it is not happening fast enough.

We need to focus more on the active implementation of renewable energy solutions sooner than later. We are in an increasing race to work towards achievable goals to reduce global warming in the very ambitious time scales of the UN Paris climate agreement in 2016. This comprehensive agreement is to keep the global average temperature rise remaining below the two-degree Celsius agreed by 2050.

Presently we are failing behind this “two-degree pathway” deemed as essential, and we are currently forecasted to release more carbon and gases into the atmosphere, and that has severe repercussions for our planet.  Governments will need to introduce more substantive policies to meet the emission targets they signed up too and society, industry and us, as individuals will have to undergo adjustments to accommodate this in our habits, consumption, and usage.

It is not just replacing energy sources; it is all about solution renewal end-to-end

We also have to focus on the broader aspects of “energy transition” by re-engineering much of the existing infrastructure to create smart grids, the electrification of many industries and the ability to introduce e-mobility across the transport sector.

The nature of the energy landscape will require the transformation of businesses, the push to find and develop new market dynamics and embrace government policy and regulations in an orderly and planned way. This “transformational mix” gives rise to different innovation dimensions to explore, be these enabling technologies, new business models, different market designs, and changes in the methods of system operation that make up a broader innovation ecosystem of solutions.

Innovation can accelerate progress, especially at the user-end point.

A very critical piece of the energy transition puzzle is the necessary focus on the end-user sectors of transport, industry, and buildings. Here, it is the combination of new system designs and ways to operate, combined with technological innovation. We need to achieve the most pressing need to undertake greater energy efficiency and effectiveness at the consumption end of energy.

The increased electrification of these end-user sectors of transport, buildings, and industry are providing new designs for energy systems to operate.  The solutions offered are placing increased emphasis on digitalization so that the system design is managed on a  more decentralized and democratized participation. These solutions are breaking up previous monopolistic providers in power generation. The changes are transforming energy management.

The end-user market of transport, buildings, and industry must shift their primary energy supply from the present 15% of renewable energy to 65% by 2050. The share of Renewable power is expected to rise to 85% by 2050 (source: Irena 2018 “Global energy transformation report”)

The role of innovation within these end-user sectors of transport, buildings, and industry will involve changes in system designs to digitalize grid services, build more local and grid-scale energy storage, deploy significant charging solutions for electric vehicles. The design of energy systems needs to bring closer to the end-user the utilization of mini-grids to enable greater flexibility and participation in energy co-operation between transmission and distribution system operators. These designs are building the two-way flow where excess energy can be delivered back to the grid.

These innovations are galvanizing change, but the vital part of any innovation change is managing the lifecycle design and transition, innovating end-to-end.

The level of investments in the existing energy system needs staging for significant change.

There is a compelling need to design a roadmap for changing the energy system in nearly all cases. Each energy roadmap needs to build a business case, one that starts by asking where are the efficiency increases going to come from to pay for any change? Why are these changes needed, and what advantages will be achieved from undergoing these changes? How long would any orderly transformation take?

Where are the opportunities to invest when we undertake system design shifts that capitalize on all the leading practices taking place around energy consumption? Where can any design accommodate to take advantage of a mix of fuels (hybridization)? How will it be designed and operated, to help in gaining from the new innovative solutions emerging, ones that utilize and deploy decentralized storage, smart grid designs in transmission, in distribution, to advance commercial and industrial solutions that can lead to new energy solutions that provide increased flexibility, agility, and adaptability.

Critical industrial users of fossil fuels need extra special attention

Most of the energy change is through the greater electrification of these end-use sectors, to gain the value of moving to variable renewable energies as prices of alternative energy become increasingly attractive in price and supply.

Equally, as fossil fuel usage becomes increasingly unattractive, both politically and by society concerned with global warming, each industry user will need to find alternative energy sources. The most significant problems presently are in the end-user industry of iron and steel making, cement production and chemical and petrochemical production, as well as aviation. They are currently highly reliant on fossil fuel. Innovative solutions here will require far more government intervention and incentive shifts and significant research and development to find solutions that are both competitive and compelling enough to make the change.

The answer, it seems, that can change the reliance on fossil fuels is a balanced reliance on bioenergy for process-heat generation and a mix of on-site and grid electricity solutions. Relocating industry will also be part of the solution over time and incentive design.  Tackling these industry-specific problems is critical for reducing global carbon emissions and pollutants by offering solutions that are attractive as alternatives, as these industries contribute critically to our present solution needs of their end-product output.

The increasing investment in Bioenergy

I have been focusing on wind and solar mostly for renewables, but the focus on bioenergy comes more into solution focus for end-use applications. I want to investigate this more but in summary here:

The ability to accelerate solutions in bioenergy, in improving heat pumps and focus more innovative solutions on managing the need for high-temperature heat keeps this energy source as key for many of the end-user sectors.

Bioenergy is a versatile resource that can be converted into the final energy for heat, power, and transport fuels. Bioenergy also can be stored in the form of solid, liquid, or gaseous fuels. The solutions through bioenergy are a real source of renewable energy solutions for modern buildings, industry, transport and power and district heating, but the challenges and solutions will come from technology innovation and increased R&D.

In many developing countries, the source of energy for cooking and partial heating needs changing. The use of coal, gas, or wood needs replacing. The application of Bioenergy solutions can make a significant contribution here, although Hydrogen solutions seem to be receiving the current publicity and are suggested as quickly approaching economic competitiveness. I think by all accounts both Bioenergy and Hydrogen are complementary solutions but can target specific application, important to consider.

Buildings have a significant potential for redesigning based on renewable energy

Buildings have a huge potential to be a substantial part of the energy transition story. We cannot expect new buildings, designed for the need for energy efficiency to simply replace the old; we must look increasingly to be retrofitting the old, or renovating existing buildings in transiting them through imaginative, innovative solutions. To facilitate this, the innovation options will be highly variable to the “state of the building” and the ability and economic returns. I feel those within building solution redesign need to be far more imaginative and offer a more coherent story to convert commercial and residential buildings to a higher renewable energy share.

The “ solution fit” needs a reasonably comprehensive solution portfolio, in my opinion. What solutions can be achieved in retrofitting or renovating buildings over a building roadmap design concept? Can district heating and cooling be part of the building solution, can hydrogen or further bioenergy as heating fuels, what and how can seasonal heat storage come into play? The solution mix around heat pumps, solar-assisted water/ space heating, the ability to clad a building (the envelope solution), the application of more efficient appliances, the ability to heat and cook from renewable energy all needs imaginative design and solutions.

The building re-design for renewable solutions is a massive test for the energy transition we are undertaking. The energy-related Co2 emissions from building need a dramatic shift. In 2015 building energy consumption was 36% from renewables. Presently estimates are that three-quarters of energy consumption in buildings could be supplied by renewables with solutions in hand or solution design by 2050.

It is going to be the solution that can expand the biomass use, combined with electricity usage based on power generated from renewables, that will combine up with innovative solutions inside and alongside buildings, to deliver on the need to reduce buildings’ carbon footprint dramatically.

Are we up to the job of renewing buildings today at an accelerated pace?

I do not think so; we need a more comprehensive overall system solution design and operation approach, that continues to accelerate the uptake of solution designs by the infusion of technology innovation. Today we are not telling that compelling story.

We have many exciting ways to accelerate the energy transition through innovative design. Today I do not see the compelling case that this is being well-communicated in solving the growing gaps in designing the end-user markets of industry, building, and transport in cohesive ways.

The building solution story of renewable energy solutions within buildings, is, in my opinion, underbaked, we do need to turn up the renewable-heat story. It requires a more comprehensive storyline that achieves the changes we need and demonstrates energy efficiency but increasingly in location-specific ways

We need a robust design of the end-user market for the energy transition, in my opinion;  that comes from telling the emerging innovating story for energy solutions in exciting and effective ways based on offering clear roadmaps of energy design.

The post Increasing innovation focus on the end-user segments within the energy transition story first appeared on Building Your Innovation & Ecosystem Intelligence.

Technological innovation has a central role to play in the Energy Transition currently being undertaken throughout the world. The shifts need to take the different parts of the energy system through a lifecycle approach to any future energy system

Briefly, our energy system has been based mostly on fossil fuels (oil, coal, gas) and as we extract these, they are non-renewable and the primary cause of the carbonization crisis we are all facing on planet earth. The solutions to replace these fuels are renewables based on wind, solar, biofuels, and have a sustainability credential. The economics of powering the energy system with renewables has got to the point where there is real competitiveness so we can undertake this energy transition and reduce the emissions of carbon into our atmosphere.

Such significant investments are made within the energy system that has assets that have thirty or even more years of “useful” life.  So within our current need to undertake an energy transition, you have to first look to improve the efficiency of your existing plant or system; then you have to make this fuel shift from fossil reliant to renewables. The lifecycle is long and difficult in any transition from one source of power as the infrastructure, supply chain, and supporting needs all evolve around that principal source of energy choice. Any change is a massive undertaking.

To get to the point where you are finally taking out carbonization fully can be a journey over many years. The role of technological innovations will significantly help make the transitions needed, hopefully in a well thought through structured way.

Six critical focal points of the energy transition need a broad focus.

The six main thrusts for technological innovation within the Energy Systems for today’s energy transition are:

• To accelerate the deployment of renewable energy technologies throughout the system.
• There is a real need to find innovative solutions that focus on the end-user sectors of transport, industry, and buildings.
• The technological and digital innovative solution needs to focus on the overall system design and the operation needs.
• Innovation needs to increase electrification through emerging solutions on digitalization of the grids and provide grid-scale energy storage for resolving variable renewable power.
• To push, nurture, and facilitate different energy sources to provide solutions to scale them up. These include battery storage, solar power, geothermal, biopower, hydropower, onshore and offshore wind and finally tidal power.
• Lastly, innovation needs to achieve an affordably decarbonize industrial transition

Besides technological innovation, there is growing potential for redesigning operational systems through new services, tools, and distributed generation deployment. There are equal opportunities to find fresh market designs that have built into them demand-response models that can provide more significant differentiation in tailored services.

Changing the design of the energy system can also offer the exciting potential of designing new business models that look to co-creation, provide more flexible power purchase agreements and bring the consumer into the system as aggregators in their own right. Many of these are solutions that continually unlock the system’s flexibility.

The diffusion of innovation is essential to understand to eventually achieve scale.

The critical point of mobilizing the energy transition comes from the rate and extent of adoption of innovation.  When you are attempting to undergo such an energy transition, the ability to recognize “adoption” of new solutions, technologies or radically new designs of energy needs to be well understood to enable this to occur.

To help understand this shift and adoption process, I turned to a theory outlined by Everett  Rogers (March 6, 1931 – October 21, 2004). He was an eminent American communication theorist and sociologist, who originated the diffusion of innovations theory and introduced the term early adopter and the model for this we have become very familiar with.

The Characteristics of an Innovation Diffusion

Roger’s theories do stand the test of time, and I want to refer to the Characteristics of an Innovation Diffusion here as it is highly relevant to technology innovation diffusion in the energy system for going through an adoption process.

He characterized these as 1) Relative advantage, 2) Compatibility, 3) Complexity, 4) Trialability, and 5) Observability. Let me briefly explain these:

Relative advantage is the degree to which an innovation is perceived as better than the product or solution it superseded. This is in cost, financial payback, utility, convenience, or advantage. In his theory, the higher the perceived advantage, the faster the rate of adoption

Compatibility is the degree in which an innovation is perceived to be consistent with the existing values, experiences, and needs of potential adopters. As we change our “norms” in energy solutions and our values and appreciation of the requirements to change, there is a constant search for growing compatibility. The more it can be seen as compatible, easy to adopt, the more likely it will be considered as a progressive solution.

Complexity. Complexity is the degree to which an innovation is perceived s being challenging to understand or use. Those solutions that are more straightforward, more intuitive or a no-brainer will be adopted more rapidly than those that have high levels of new skills, knowledge and operational experience

Trialability is the degree to which an innovation can be experimented with on a limited basis. Something we trail or pilot represents less uncertainty to potential adopters and clearly can allow adopters to learn by doing. The value of trials, pilots, and prototypes will also be adopted more quickly than those which cannot. The value within such a highly evolving market like energy transitions, the functional effects can be related to the risks of the dysfunctional. Avoiding undesirable consequences helps the rate of adoption, where new technology has many unproven aspects.

Observability. Observability is the degree to which the results of an innovative solution are visible to others. The easier it is to see the benefits, as real and tangible, the more likely it gets adopted. The epidemic model applies here. When innovation spreads is when it is adopted and valued, and having contacts with users of the solutions significantly helps diffusion.

Rogers also discusses the adopter profiles familiar to many of us, early adopters, through to late majority to be the process of diffusion (see above). The critical point here is the process of diffusion needs to be well-managed as the process of development

So as we call for more technological innovation in the energy transition, the value of Rogers diffusion of innovation becomes essential to appreciate.

The need for accelerating the energy transition will be highly reliant on organizing the technological innovation pathway. Innovation is far broader than just R&D; it will also come from business models, changing existing policies, processes, and market design to provide the impact necessary for the changes we need in the energy system.

As we search for enabling technologies that facilitate the integration of renewable energy, accelerate storage, explore sector coupling, introduce new ways to operate within the electricity system, seek out new power generation, design the grids for increased flexibility and digitalize solutions to provide further services, tools and distributed generation deployment knowing how to diffuse innovation in these general five approaches becomes valuable.

It becomes valuable to design technological solutions to be able to “travel this diffusion path”; it gives market confidence and encouragement that the innovation story is designed to take decisions through this innovation adoption approach for the solutions the energy transition has to pass through.

Does it make sense to apply the diffusion of innovation? I think so as you have a validating process working through these five innovating characteristics.

The post Innovation adoption in the technology lifecycle for Energy Translation first appeared on Building Your Innovation & Ecosystem Intelligence.

Adapting always seems a work-in-progress, or it is often something where we are simply making little or no progress!

We often stay ‘stuck’ in the way we do ‘things’ around here, never seemed able to break out into something new or different.

To adapt we need to open ourselves up to learning and adjusting our organizational ‘form’ in new ways.

In business, there should be a constant battle to reconfigure the assets and extend the existing capabilities. Yet often these stay ‘static’ not learning or improving.

In our innovation activities, there is an even greater pressing need to build into our thinking the ability to find more dynamic capabilities. It is a constant innovator’s dilemma to think through and get right.

What might help?
Recognizing our need to think differently
Here I am wanting to outline some opening thoughts for you to consider in becoming a more adaptive organization.

There has been a lot of discussion about finding new organizational forms that need to somehow reflect on pushing out and developing around unique combinations building into our existing structures these four distinct ‘classification’ states: a) collaborative, b) learning, c) emergent and finally d) ambidextrous.

These ‘states’ are viewed to be really helpful in accelerating an organization’s growth potential and improving greatly on the innovation cycles.

Partly this is being driven by a recognition that we are becoming more dependent on a growing set of challenges that include: a) gathering and synthesizing far more knowledge than ever before, b) the fact we are increasingly becoming dependent on the performance of others, c) the assets that we simply own and have in place are just not good enough today and d) our abilities to “read, react and respond” to changes occurring that just seem to be constantly accelerating away are becoming more difficult to keep adjusting too in our present organizational structures.

Somehow we need to respond in more agile, fluid and adaptive ways. Roger Martin suggested some time back “that modern leaders need integrative thinking to embrace complexity, tolerate uncertainty and manage tension in searching for creating solutions to problems“. It is learning to make different choices in a far more creative process, often more disruptive to our established norms.

All these are challenging our existing organization’s systems, structures and processes and it is a growing process of understanding that will emerge to form these new ways of operating, far more reliant on technology, rapidly available and adaptive systems and flexible thinking and design.

The need to become bolder in our thinking

We need to encourage fresh and bolder investments in knowledge, in infrastructure, systems and in managing these. Ones that focus on activities that pursue new approaches that lead to exciting innovation, that really does spurs growth. These are about learning, searching and delivering the winning value on the new innovation value scale of ‘new generation activity’ from recognizing how we balance out exploitation (extending the life) and exploration (new understanding). We need to appreciate the separation effect for innovation.

Most of our organizations today struggle with applying the ‘appropriate’ resources into these two ‘dual’ approaches. Many try to separate them, often hiving off the more radical innovation development part to protect it from being overwhelmed by the often overbearing focus on the short-term and exploitation. Yet this is a real mistake, as they are necessary to be combined to improve what we have, as well as add in a significant change to keep the business healthy (efficient and effective) and equally growing (through innovation)

We are living in a world of apparent contradictions

We need to manage with one eye on austerity, the other on emphasizing the need for innovation. The popular ‘answer’ to this is simultaneously exploring and exploiting, yet these two organizing and managing styles are hard to find the right balance we need. We want to have a stable environment but we need to equally be dynamic, constantly improving and introducing new innovations.

These are a significant range of questions we have to consider before we decide to establish the ‘appropriate’ position of how much we need to emphasise on the exploit and explore, both needed to be balancing the stability and delivering the dynamic. Much is dependent on the diversity and dynamism of the business environment we are operating under, the resources we have available or can call upon, the market conditions we are facing, as well as predicting where all of it is heading. Easy huh!

Equally, it is dependent on what we are attempting to do.

Exploitation is the “refinement and extension of existing competencies, technologies and existing knowledge” whereas exploration is “our ability to experiment with new alternatives” and each is certainly built on our learning and accumulating experiences. Exploitation on its own, or if heavily emphasized to the exclusion of exploration, can eventually lead to failure, whereas too much exploring and experimentation can limit exploitation. Each can become a “failure trap”.

The “success trap” is when exploration leads to exploitation and exploitation to more exploration, a reinforcing cycle through clarity of mindset and managing between routines and experimentation. These can have very different activities to manage and are the cause of many of the tensions within the balance needed in organizations to innovate the new and manage the existing. Each is often competing for scarce resources, a constant interplay.

The argument for establishing an ambidextrous organization has proffered different opinions for pushing for variations based on: a) clear separation, b) developing the abilities to switch, c) become self-organizing or d) using an external ecosystem thinking to establish the right mix between exploit and explore. Each is determined by a unique mix of considerations.

The answer for each of us is that it really does depend. It has a paradox only you can solve in your unique situation. It comes down to trade-offs. So what do we need to consider? Do you tightly couple these or seek degrees of separation?

We need to seek balance, strive for dynamism and accelerate innovations
With this ever-increasing set of tensions, we are in real need to shape capabilities. It has been suggested * that we have to resolve four closely interrelated ‘tensions’ to help us in leading to understand what, where and how we design ambidexterity into our management within organizations.

We need to consider how we would balance these four tensions:

1. Differentiation and Integration. How do we separate our exploitative and exploratory activities into distinct organizational activities or units? Integration is deciding the mechanisms that can address these. This deciding point between these two will often boil down to the degree of importance placed on the need for exploitation and exploration; these should not become mutually exclusive positions.

We must balance in constantly adaptive ways this duality. It is the specific task or activity that can largely determine this but it needs a conscious designing in.

2. Individual or at the Organizational level. The ability to ‘fuse’ any approach across multiple levels of need at organizational design and the individual’s ability to explore and exploit together, or at separate times, needs resolving. Having different teams, one exploring, one exploiting or having individuals who have a higher propensity for one or the other, to be blended into a diverse team solving a complex challenge that needs this dual thinking purpose are some suggested approaches.

Again it comes back to the challenges that need to be addressed, as the management of contradictions and conflicts needs different alternatives, in our creative thinking. The orientation between the short-term and longer-term need equally to be well thought through. We need to fit innovation into its appropriate context, contributions and characteristics of the people working on this.

Finally, here, it is the diversity in knowledge coupled with experiences. that give us richer linkages for innovation. It is the working consciously on the alignment and adaptability within the mix and at these different levels required. There is a fluid need to move between these levels of design and need.

3. Static versus dynamic perspectives. We do need to find a way to simultaneously pursue the two activities of exploring and exploiting. We need to reduce the static and emphasis the dynamic, by constantly adopting ‘certain’ configurations to meet the innovation needs we are working towards. Achieving a sequential state or pushing for a simultaneous pursuit of the two becomes the key consideration.

The key is to repeatedly and intentionally orchestrate the firm resources; it is striving to gain interactions not separating them. Hiving exploring off into a discrete unit creates problems in any down the line handing off back to the operating unit responsible for the execution of innovation. There is this real need to think through a more comprehensive innovation life cycle here, as innovation is certainly far more dynamic (or should be)

4. Internal versus External Acquisition and Interplay. The need is to gain and utilize the knowledge and this ideally comes from both internal and external resources. The stronger we have in place alliances, outsourcing arrangements and partnerships, we are building our ‘combinative capabilities’ and how we can consciously apply a more absorptive capacity approach to synthesize, apply, acquire and absorb knowledge.

This allows us to develop a higher degree of knowledge flexibility across organizational boundaries and find different ways to integrate this into our innovation thinking. We are always in need of novel, diverse alternatives to any innovative thinking.

Knowledge diffusion becomes vital to manage the exploit and explore and this needs to flow across the organization, not stay limited within one part, reducing the opportunities to leverage this acquired knowledge. Here lies the seeding of corporate renewal.

Each of these interrelated tensions needs a high level of resolution.

The level of insights into the strategies, structures and processes that allow them to be in this ‘dynamic tension’ for innovation to occur, is one we must constantly strive towards a balance and harmonization between the two activities of exploitation and exploration. These tensions will actually require a high level of constant and often contradictory levels of requirements. How can we design this into the fabric of the organization?

This set of challenges does require this deeper thinking about the development of a more ambidextrous approach to innovation. How can the organization be designed in adaptive ways around this constantly evolving innovation need.

The real hard questions to answer will eventually lie in asking “what are the similarities, differences and interactions between the individuals, a group’s and an organization’s creative capacity, diffusion capacity, absorptive capacity for knowledge and risk-taking capacity”.

Where are the balances needed to be achieved in organizational adaptation, innovation need and learning? How can we design the type of dynamic environment that I believe can evolve by an appropriate design unique to you, one that I regard as requiring the understanding of building our innovation fitness landscapes

Building these changing landscapes to meet opportunities and situations to respond to, at you need to adapt,  manage and operate within; then determining what you need to have available, knowing the how to go about bridging the gaps, to arrive at a state of being constantly adaptable as your goals adjust and change?

It is certainly complex and we all need to learn, adapt and work through this balance in our exploitation and exploration needs. It is one critical part of future organizational design. It does need individually working through to meet your own specific needs for growth and protection.

It does mean that the level of sensing, seizing and reconfiguring is critical to work upon and that means it has to be highly dynamic, in building the dynamic capabilities required for innovating because nothing can be static for very long in today’s world.

The key reference used is drawn from the paper “Organizational Ambidexterity: Balancing Exploitation and Exploration for Sustained Performance” written by Sebastian Rush, Julian Birkinshaw, Gilbert Probst and Michael Tushman. This paper has been at the core of the post.
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The post Striving for the innovation balance: between exploring and exploiting. first appeared on Building Your Innovation & Ecosystem Intelligence.

One of my favorite books is “Dealing with Darwin– how great companies innovate at every phase of their evolution” written by Geoffrey Moore. It is well worth a read.

When you work through his other books and connect thinking of “Crossing the Chasm” and “Inside the Tornado” you really appreciate the learning stories coming out of Roger Moore’s studies of the Technology Adoption Life-Cycle.

We all need to rethink a lot as the new challenges come rushing towards us.

In his work, Geoffrey Moore talks about ‘traction’ and I think this is a great word for thinking about how to gain diffusion and adoption in product, service or business models, to gain market and customer acceptance.
Over three posts I am looking at different aspects of “diffusion and adoption”

The first post outlined the different theories and establish their value in our thinking.

The second post relates these theories into their to achieve success in penetrations of our target markets and increasing sales through growing adoption.

This is the third and final post in this series, it looks at how Rogers’ theories relate to us in today’s connected world, and in particular with reference to Apple and finally offers up some of the reasons why diffusion can fail to occur.

Seeking even more than ever, the One-2-One (1to1) of many
Marketing departments talk penetration, “message penetration, market penetration” and so often ‘force’ customers to become aware and then buy. Does this really work today? I doubt it.

Also many organizations hang on to old media ways to get their message across when the use of technology, the internet and social engagement may seem harder but I believe is far more rewarding to engage with the customer on a more personalized basis. I regard this as 1 to 1 of many.

Today we are in an ever-faster world

Connectivity is driving the diffusion rates of nearly everything. Just take a look at the following table:

Even this table is already out of date on the speed to reach critical mass. Companies are not just setting hurdle rates on launch dates but demanding innovations that have critical mass in revenue and when they achieve critical mass.

It is not unusual to set 18 months to achieve critical mass from the inception to settling on the critical factors that make a value proposition to drive penetration. This can only come through engagement and that comes through technology making the connection to the user.

Just study how Apple manages its diffusion and adoption cycle

There are lessons for us all to learn here. Apple has not been the first in markets, they are a classic fast learner and follower.

Yet they master the convergence of ‘breaking’ technology, design, user experience, pushing materials used and providing ease of use within the make-up of the product, and deliver this ‘bundle’ through the sheer generation of excitement and buzz.

The huge difference is their deep understanding of what can be put together that achieves this diffusion and adoption. What can others learn from this integrated approach to product and people?

Take the iPod for example

The first digital music player entered the US market in 1998 and it was not until 2001 Apple released the iPod.

The market had already shown signs of plateauing at the time of Apple’s launch, which must have been worrying.

Yet it was the unique factors of Steve Job’s clear vision of what a musical experience should have, Apple’s superb understanding of design and usage of materials, and its building upon the growing brand recognition and reputation as front edge.

Yet Apple also benefited from previous product releases because the behaviours and expectancies were being understood and were able to be articulated far more to validate and confirm Steve Jobs emerging view on what customers actually wanted- their own unique choice of music in the palm of their hand.

Steve Job’s innate sense of driving a solution to a winning value proposition by demanding all the parts to be incorporated, often taking uncompromising positions, was the additional factor. For example, being determined to offer a progressively growing store of downloadable music provided that incredible ‘complete’ usage experience. It met an un-articulated need but saw the different signals in its convergence of a total package.

Apple gave everyone in the adoption curve something that set their imagination alight.

Recommendations compounded so even late majorities and laggards felt compelled to buy, and the sales simply exploded.
The basic criteria with the theories of Roger’s Diffusion and Adoption were met.

Then look at the Apple iMac

For the consumer, Apple took away complexity. The learning gap became dramatically reduced.

It was quickly understood you took your computer out of the box and plugged it in.

The complexity of most of our past experiences in complicated set ups, the need to download and fiddle with conflicting software, had been taken away.

Apple set about integrating the system and providing a better user experience. It did away with proprietary connections, set USB and CD-Rom drives as their standard, dragging along most in the industry. It again focused on pushing to the maximum from Rogers characteristics of innovation.

The iMac proved to be phenomenally successful, with 800,000 units sold in 139 days. It’s translucent plastic case, originally Bondi blue and later various additional colors, is considered an industrial design landmark of the late 1990s.

Again design, attention to details, focusing on user needs to reduce complexity, offer relative advantage, make the way forward as compatible and integrated, allowing a fast set up to gain immediate experience and a great design or observability ticked all the boxes of Rogers Five Factors.

Then we get to the iPad

Where do you start? The iPad had built-in Wi-Fi and, on some models, cellular connectivity.

An iPad can shoot video, take photos, play music, and perform Internet functions such as web-browsing and emailing.

Other functions—games, reference, GPS navigation, social networking, etc.—can be enabled by downloading and installing apps. As of October 2013, the App Store has more than 475,000 native apps by Apple and third parties.

There have been five versions of the iPad. The first generation established design precedents, such as the 9.7-inch screen size and button placement, that have persisted through all models.

The iPad second generation  added a dual core Apple A5 processor and VGA front-facing and 720p rear-facing cameras designed for FaceTime video calling.

The third generation added a Retina Display, the new Apple A5X processor with a quad-coregraphics processor, a 5-megapixel camera, HD 1080p video recording, voice dictation, and 4G (LTE).

The fourth generation added the Apple A6X processor and replaces the 30-pin connector with an all-digital Lightning connector.

The iPad Air added the Apple A7 processor, the Apple M7 motion coprocessor and reduced the form factor for the first time since the iPad 2. iOS 5.1 added Siri to the third and fourth generations and the iPad Mini.

There have been two versions of the iPad Mini.

Apple were delivering wave upon wave of new technology in a rapidly accepted format.

A story of design, combining technology, understanding the unmet needs of the market, combining revolutionary materials. It filled a need, and it ticked all the boxes again of Rogers Five Factors of Product.

Yet we had by this time the real effect of the People Difference.
Apple have such a powerful body of innovators and early adopters creating such a pre-launch noise, it draws in early and late majorities.

Apple has been a fashion ‘must have’ statement.

Demonstration of products in Apple stores are ready to be put to any user test, the staff are providing you a ‘user experience’ and support structure that understands our needs and provide all your personal reasons to adopt.

The advocates of Apple products are phenomenal. They are nurtured, engaged with and pampered, as they generate such chatter and noise it can’t be ignored. It delivers the powerful messages Apple want to get out there for accelerating sales at mind-boggling speed.

Apple has institutionalized its product and people diffusion, and adoption process – can you?

We can all take away some powerful learning from this by aligning the theories of Rogers, articulated originally in 1962 and see how they seem highly relevant to Apple’s approach to its thinking.

They have added triggering (conversations, user experiences) with contagion and have been working the different tipping points to gain market traction, penetration and constant appeal to stay up to date and in tune with the latest and greatest.

Lastly let’s remind ourselves why diffusion often fails to occur

1. Getting the price wrong and staying stubbornly rigid with it
2. The wrong identification of the target markets
3. The poor selection of channels often because they are known, and they’re the sales forces’ most comfortable point of contact
4. A really poor communication of the product or service benefits
5. The unique attributes are over-hyped and quickly not seen
6. The new product really does not give many benefits over existing products
7. It simply has no innovative advantage, it was more of a cost-reduction exercise
8. The ease of access to the relevant information about the product is complex, difficult, time-consuming and unclear. It becomes complex
9. The real needs and expectations of the consumer were actually ignored, never discovered or just not met
10. The product or service offers no really clear value proposition to switch and buy.
I’m sure you could add a few more but I leave those to you.

The principles of diffusion and adoption I believe are both important in innovation.

Working the diffusion and adoption theories and putting these into your practice is something that needs an integrated approach, it might develop over time, perhaps through serendipity but knowing its principles helps you begin to map out the pathway.

This is the third and final post within the discussion on exploring diffusion and adoption for innovation.

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Publishing note:  This blog post was originally written on behalf of Hype and with their permission I have republished it on my own site. I recommend you should visit the Hype blog site where they have a range of contributors writing about a wide-ranging mix of ideas and thoughts around innovation, its well worth the visit.

The post Exploring Diffusion and Adoption for Innovation – Part 3 first appeared on Building Your Innovation & Ecosystem Intelligence.

The future within our engagements will determine diffusion and adoption

It is all about letting go but also grabbing more at the same time, and then finding ‘it’.

Technology has opened up the door to both scale and fragmentation and social business is the one pushing through this open door.

We are increasingly facing the Collaborative Economy everywhere we turn. Social business is becoming the denominator of success or failure.

We are needing to confront the new questions that are emerging
New rules are emerging – you could say new theories – and where are these fitting within the corporate mindset?
The shift of what our customer means to us, are we still competing with them, pushing them to accept a value proposition that forces them to begin to look elsewhere?

Are we still determined to hang onto control, in the (mistaken) belief we know what is best for our customers?

Are we really bothering to learn the power of networks, cultivating communities, fostering co-creation and optimizing shared value, instead of just creating and selling things?

Are our structures and processes still stuck in the past or are you transitioning to managing a more social business that operates in more dynamic ways?

There are a huge number of new rules and ways to manage. It is the ones that master these that will succeed in diffusion and adoption at very different speeds than we can imagine today.

In three posts I am discussing different aspects and challenges within diffusion and adoption for innovation

The first post outlines the different theories and establish their value in our thinking.

The second post, this one, relates these theories into their to achieve success in penetrations of our target markets and increase sales through growing adoption.

The third and final post in this series looks at how Rogers’ theories relate to us in today’s connected world, and in particular with reference to Apple and finally offers up some of the reasons why diffusion can fail to occur.
Back to this blog……..

We are all in need of answering numerous questions and finding our way.

Social media is for many business organizations, the new kid on the block

It is relentlessly chipping away at the fabric of how organizations have been organized. In less than half a decade societal and cultural shifts through technology, the transfer to global open digital networks have taken us way beyond “just the internet” for connecting.

We are in need to engage in totally different ways. It is really not good enough to sell just products and services anymore. These are basic value propositions. Customers are looking on how these are connected into different “bigger pictures”. 

The questions of your sustainability approaches, environmentalism, corporate social good and responsibility and a growing interest in governance are shifting their thinking.

Your customers are wanting to connect and establish a different level of trust than simply those invested in a brand name, that is becoming table stakes or even irrelevant.

We are moving into a very different territory. Grasping the changes to your business are highly challenging.

Large organizations are being challenged by the sudden rise of self-organizing communities where people come together online and create shared value that often forms an immediate organization to challenge the existing. Traditional business models need to learn to adopt in different ways themselves.

In an era of high-velocity online start-ups, where the next generation of digital businesses are taking up the space as they focus increasingly on the dynamics of social business where does this leave our existing organizations?

Everything has sped up, we diffuse and adapt in seconds

There is an urgent need to “letting go and grabbing more”. Traditionally “we” provide products and services and many of our existing organizations are slowly coming to grips with providing on-line services.

The belief is this is enough to satisfy customers, keep them buying and using the product or service. Is it?

The social connected economy has reversed the relationship. Consumers just want to use and have provided product and services on ‘their’ demand and seek increasingly the platforms where they can easily go to find out and then use the required products and services. Often they don’t want to buy these, they just want to rent them to do the appropriate job.

The whole movement of jobs-to-be-done, identifying customer needs is yet again a place of increased focus. The larger organization still struggles with this as it wants to fit this ‘seen’ need into their structure and system.

They are spending growing time adapting while others are pivoting quickly to capture this fluidness in need.

In many ways diffusion and adoption lies more in the organizations inabilities than the customers. Perhaps the theories of Rogers have reversed.

It is the power of people and how organizations react and determine differences that will determine diffusion and adoption, as explained by Everett Rogers. Dion Hinchcliffe, an expert on next-generation enterprises suggests an Engagement Fabric.

Are we in a reverse situation for diffusion and adoption?

Consumers race to diffuse and adopt, it seems our larger business organizations struggle. The organizations are the ‘laggards’.

We need to think about the organizations ability to engage at scale. Perhaps we need a further theory to add to Rogers ones. The interpretation of the Engagement Fabric goes like this for aiding diffusion and adoption:

The organization as one does need to engage to any, not many. It is the ability to allow information to flow; we learn to aggregate stories or decipher trends to engage back to new groups of audiences that see your diffusion as valuable to their adoption.

The organization continues to throw open its store. The ability to engage and promote self-organizing communities to exchange and extend around our product and services and keep them as engaged stakeholders who you work to keep involved in the evolution that triggers better innovations.

Simultaneous engagement that is constantly synchronized with the evolving story, built more on business and social value, less on your product or service. Constant insights and thinking get captured for its ongoing community value and ability to keep improving on the product or service offered.

Making the space highly visible and user-friendly. By ensuring ‘ease of access to knowledge you are allowing conversations to build and become increasingly valuable to all involved in the community.

The ability to analyse, interpret and filter. Offer the place that captures the many good insights so as to set about the continued building of value into your products and services.

So we need to transform our own internal design to better diffuse and gain increasing adoption

To quote from Dion Hinchcliffe whose future thinking I have drawn heavily upon for this post makes this comment:

We need to rapidly move to an engagement platform

Diffusion and Adoption are even more of a business organization’s challenge to adapt to the most significant set of changes since the internet.

It is the power of all the disruptive technologies, the power of social business and the incredible impact of all the connected networks are accelerating acceptance or rejection.

Diffusion and Adoption is so far more complex but the principles of Rogers theories, offered nearly fifty years ago, can help to understand a single innovation perhaps.

It is today the way you build your platform for engagement which will determine where you stand in any adoption race for the health of your business and its model in the future.
It is the business organization that is in its race for adoption.

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Publishing note:  This blog post was originally written on behalf of Hype and with their permission I have republished it on my own site. I recommend you should visit the Hype blog site where they have a range of contributors writing about a wide ranging mix of ideas and thoughts around innovation, its well worth the visit.

The post Exploring Diffusion and Adoption of Innovation – Part 2 first appeared on Building Your Innovation & Ecosystem Intelligence.

According to Professor Clayton Christensen and drawn from his book “Seeing What’s Next: Using the Theories of Innovation to Predict Industry Change”, by Clayton M. Christensen, Scott D. Anthony, and Erik A. Roth published by Harvard Business School Press, the only way to look into the future is to use theories.

“The best way to make accurate sense of the present, and the best way to look into the future, is through the lens of theory.” The theory of innovation helps to understand the forces that shape the context and influence natural decisions.

This might not be fashionable for many because as soon as you introduce “theory” into the discussion for many of my practical colleagues they want to dismiss it.

Going back to Christensen “good theory provides a robust way to understand important developments, even when the data is limited. “Theory helps to block out the noise and to amplify the signal”.

Diffusion of Innovation Theory is important for our innovation understanding
One set of theories I believe we simply cannot ignore even more today lies around the work of Everett. M. Rogers where he outlined his thinking in his book Diffusion of Innovations the first edition was published in 1962.

The fifth edition (2003, with Nancy Singer Olaguera) addresses the spread of the Internet, and how it has transformed the way human beings communicate and adopt new ideas.

Over three posts I will look at different aspects of “diffusion and adoption”

The first post, this one, outlined the different theories and establish their value in our thinking.

The second post, relates these theories into their to achieve success in penetrations of our target markets and increase sales through growing adoption.

The third and final post in this series looks at how Rogers’ theories relate to us in today’s connected world, and in particular with reference to Apple and finally offers up some of the reasons why diffusion can fail to occur.

First we need to have a clear grounding or reminder within the theories
By developing our understanding of why some products seem easier to diffuse while others can take longer or often fail, innovators can improve their likelihood of understanding the differences through exploring these different diffusion and adoption theories.

Besides the classic “S-shaped curve” associated with diffusion, it is useful to also reflect on this tougher curve to manage from its development costs into profit requires a greater focus on the commercialization stages.

Product and People determine diffusion and adoption
According to Rogers, the rate of diffusion can be attributed to a combination of “product differences” and “people differences”

Product differences
Research suggests that up to 87 per cent of the variance in an innovation rate of diffusion can be attributed to the following five product characteristics. These are known as Rogers’s Five –characteristics of Innovation.

Relative advantage refers to the degree perceived to be better than the product (or service) it replaces.

Compatibility is the extent to which an innovation is perceived as being consistent with the values, past experiences and needs of potential adopters.

Complexity is the degree to which the new innovation is perceived as being difficult to understand or use.

Trialability is the degree to which the new innovation can be experimented with, piloted and used on a limited basis.

Observability is the degree to which the results of an innovation are visible, observed and communicated to others and where the rate of adoption can often be determined.

People differences
Once the product’s position in relation to the Rogers Five Factors is known, the diffusion process is best managed by focusing on the people’s difference.

The classic bell curve is broken down in the five categories of adopters. 

It is from this initial work of Rogers we then got Geoffrey Moore’s classic on “Crossing the Chasm” which recently has been significantly updated in a recently released book around the Technology Adoption Lifecycle.

The chasm can happen throughout the early adopter’s phase, you have to be alert and responsive enough to find solutions quickly enough to bridge this and ‘cross that chasm.’ Pivoting on the parts that are good, exploring the parts that are needed.

The five adopter categories are:

Innovators– venturesome, risk-taking, information seeking, early seeking status and very experimental, enjoy the degree of early challenge or even uncertainty involved.

Early adopters– Often respected opinion leaders within their social groups, seen often as role models for others.

Early majority – more deliberate before adopting new ideas; interact frequently with peers and trendsetters. They like to merely stay ahead within the curve from that more informed decision-making.

Late majority – Tend to be sceptical, cautious to adopt but ‘feel’ pressure of peers to adopt, tend to need intervention strategies to overcome barriers and see their ‘needs’ resolved by the innovation

Laggards – Traditional , last in the social system, often they pay little attention to opinions of others, they have more a clear point of reference in the past to overcome, are often suspicious of new innovations and their decision process is often lengthy.

Then we have the decision process or stages of adoption:

Awareness and Knowledge – refers to a customer’s acknowledgement of the presence or existence of the new innovation and where they form a general perception of what it might entail and is often driven by the intersection of need recognition through marketing communications. This is the point of being inspired to find out more.

Persuasion and Interest – this occurs when a consumer processes the available information associated with the innovation and considers the product or service’s appeal on this. This positive or negative attitude tends to be based on the five characteristics mentioned above. Here the consumer actively seeks out information and details.

Decision and Assessment – Having considered the persuasion factors the consumer will come to a decision about whether to adopt or reject the innovation. Their activity in seeking out advice, data gathering, comparing or making different assessments happen clearly here. They consider the switching costs and weigh the advantages up. This is the hardest stage to understand.

Implementation and Exploration – These are the series of activities to put the innovation to use. The consumer employs the innovation to a varying learning degree. The usefulness is determined and they may search for further information about it.

Confirmation and Adoption– is mostly concerned with post-adoption behaviour exhibited by the adopter, reinforced by the innovation’s actual delivery against the relative advantage ‘claims,’ its complexity and compatibility on their understandings. The individual finalizes their decision to continue using it or searches for extending its use to its full potential.

So in summary for this opening post:
Diffusion is the manner in which innovation spreads. It is the degree how we facilitate, accelerate, and sustain it.

There are constant difficulties in exploiting these different theories within organizations, the questions are where to place the emphasis and the means of communicating these. The process is contingent upon the structural, cultural and size and scope considerations.

You have to watch for that constantly changing the implementation requirements and lack of sufficient resources or application, as they considerable constrain the innovation outcomes and often you don’t spot these until it is too late

The execution or commercialization stage of any new innovation often fails to address the theories offered by Rogers adequately enough, then organizations often suffer poor diffusion and adoption rates, unaware of the considerable efforts this stage of understanding diffusion and adoption needs to address.

The second part of this post will deal with….

My second post in this diffusion and adoption discussion will deal with managing within a far more fluid set of conditions than we have seen to be facing previously.

The combination of technology, social media and the internet gained a ‘closer’ relationship with final consumers encouraging engagement and feedback has introduced a far more dynamic environment.

Innovation adoption or rejection is getting riskier, and far more complex and we need to bridge the learning gaps far better and smarter. Are Roger’s theories still relevant or even more so today and in the future?

Then the third post provides different examples of diffusion and adoption and offers a starters list of why diffusion can often fail to occur.

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Publishing note:  This blog post was originally written on behalf of Hype and with their permission, I have republished it on my own site. I recommend you should visit the Hype blog site where they have a range of contributors writing about a wide-ranging mix of ideas and thoughts around innovation, it’s well worth the visit.

The post Exploring Diffusion and Adoption for Innovation – Part 1 first appeared on Building Your Innovation & Ecosystem Intelligence.